NOTE on the proposed EU/UK agreement

Presented by Donald Tusk

[1]

Further to David Cameron’s letter of 10th November 2015 which highlighted his four demands[2], on 2nd February Donald Tusk published a draft agreement in response, which poses a number of serious problems.

It is essential to keep the UK, which is an important, business oriented country and a great democracy, as well as a strong global player, in the EU. But in order to clarify the relationship instead of creating further mistrust, it is essential that the concessions made really clarify the ambiguities upon which, until now, the relationship has been based. The agreement must not create legal uncertainty, it must be fair for all and although the UK should not be discriminated against, nor should the Euro zone be either.

Concerning the method chosen by President Tusk, one can have serious doubts.

A say for all?

As stated in the Treaties, each Member State has the right to leave the EU (article 50 TEU). But if the purpose of the agreement is not to organise how the country leaves but on the contrary the grounds on which it remains with the others, it is incomprehensible that only one Member State would be allowed to express its willingness to continue. As far as France is concerned, a referendum took place concerning British membership, in the seventies, when the UK joined. No-one can imagine that the Bundestag or other national Parliaments will refrain from checking what the agreement foresees.

Legal uncertainty

The 28 governments are on the verge of concluding an international agreement, outside the framework of the EU, interfering with EU law. On the one hand it is presented as “legally binding”, on the other it is only “interpretative”. The only clear point is that it is unclear and might create a mess that would destroy mutual trust.

The Member States cannot, single-handedly, interpret the Treaties, as they do for example on issues called “sovereignty” by Tusk. The UK might have some difficulties with the “ever closer union” it has accepted in every previous treaty, all ratified by Westminster, but the governments cannot now decide that is not “an equivalent to the objective of political integration”; it would be a treaty change. Nor can they prejudge the result of future Treaty revision or the legislative process.

The only legally sound solution is to launch a formal revision of the Treaties, thus ensuring legal certainty and allowing each party to formulate their demands.

Discrimination of the Euro zone

The UK has never been discriminated against. When the UK decided not to join the Euro it took a sovereign decision and has an exemption.

This agreement would change the Union from being one with one currency, and thus one institutional framework, to a Union with multiple currencies and still only one institutional framework. As the protocol on the Euro Group clearly states, the signatories of the Maastricht Treaty envisaged the current situation as provisional: one day, all Member States would have joined. Tony Blair even promised a referendum on the Euro. That is the reason why separate institutions for the Euro zone were superfluous.

If now the decision to stay outside is considered definitive, the agreement, as presented, would actually discriminate against the Euro zone as the UK would still have its say on decisions concerning the ECB, the budgets of countries of the Euro zone and no obligation of solidarity towards any Euro zone country. In contrast the Euro zone has no say on British monetary policy decisions and might have to support costs linked to the location of derivative clearing houses outside the Euro zone, for example in London.

This is not acceptable for Euro zone Member States. For his part, David Cameron clearly stresses that he does not want to interfere with further developments of the Euro zone.

As the agreement shows, the UK already has so many opt outs that it is not unreasonable to question if it is really still a member of the EU. Why should those who are not as committed have the same status, within the institutions, as those who are deeply committed?

Contradictions concerning the Single Market

On the one hand the agreement claims that the Single Market is reinforced. Concerning the improvement of competitiveness, where the UK government has a point in criticising the EU, reference is only made to previous declarations and promises. This is a missed opportunity to get to the bottom of a serious problem which impacts on growth and employment.

On the other hand, the draft agreement backs out on previous agreements concerning financial services, in particular the “Single Rule Book”, placing the City outside of the joint rules. There would be no more Single Market for financial services.

Free movement is also worryingly restricted. Since 1957 the free movement of people has been one of the four fundamental European freedoms, no discrimination between citizens of different Member States is permitted. The Court of Justice has however ruled that a Member State can refuse to pay social security to Europeans engaging in “social tourism”. Rather than change one of the cornerstones of the Union the British government could decide to reform their generous social security system.

Contradictions concerning improved European efficiency

While wishing to have a more efficient EU, David Cameron wants national parliaments to have increased powers to block proposed legislation. The result is a proposal which has no legal base in the Treaties, interferes with the legislative procedure (right of initiative of the European Commission, co-decision between the European Parliament and the Council as the two legislative branches), and has a threshold which is so high it is unlikely to ever be used.

There is also a risk of the European Council attempting to water down legislation concerning the Banking Union (Euro zone) through the option of an additional scrutiny of proposals.

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In a nutshell, this ‘pick and choose’ approach could be the undoing of the EU, particularly now when Euroscepticism is so popular. Marine Le Pen has already made declarations in order to get “a better deal” for France. Others will follow.

The method used until now is not appropriate. It is not legally sound. Nor is it politically fair.

What could the solutions be?

To complement this renegotiation an initiative concerning the Euro zone is needed.

The British Prime minister has already stated that he does not want to block the further integration of the Euro zone and that he wants a fair deal. These are important points.

The French President could refuse a deal because it is an inappropriate deal, which puts the legal framework of the EU in danger, does not sufficiently respect the European peoples, including the British, and discriminates against the Euro zone.

Mario Draghi has stated many times that what is needed is for joint policies, notably economic and social ones, to accompany the single currency. This means that the Euro zone needs more democratic and better controlled institutions, and its own independent budget. It is committed to become an ever closer union, as 6 ministers of foreign affairs recalled this week[3].

Nothing must stop the Member States who want to make progress from advancing, nothing must oblige those who are hesitant to follow, as long as it is clearly stated that they are not discriminated against but have instead taken the sovereign decision to stay on the margins.

[1] Documents EUCO 4/16 to 9/16, 2nd February 2016

[2] make the EU more competitive, limit social security allowances for migrants from other Member States, clarify the relationship between the Euro zone and the non-Euro zone, an opt-out from “ever closer union”

[3] http://www.esteri.it/mae/it/sala_stampa/archivionotizie/comunicati/2016/02/joint-communique-charting-the-way.html

2017-05-19T00:50:22+02:00